Deja vu? High prices, low growth in 2013

SINGAPORE - Slow growth and high inflation will continue into 2013 as Singapore presses on with restructuring towards productivity-driven growth, economists say.

The 21 professional forecasters polled by the Monetary Authority of Singapore (MAS) in November reported a dimmer economic outlook for both this year and the next.

They now expect the economy to grow a slower 1.5 per cent this year, in line with the official forecast but down from the 2.4 per cent median forecast from the last survey done in August.

That itself had been a downgrade from May's median forecast of 3 per cent.

2012 has been a year of narrow escapes from technical recessions for the Singapore economy.

It remains to be seen if a technical recession - defined as two straight quarters of sequential contraction in GDP - will materialise in Q4.

Meanwhile, inflation defied initial expectations to stay stubbornly high through the second half of the year.

That has prompted economists to expect higher 2012 inflation of 4.7 per cent, up from the last survey's median forecast of 4.4 per cent.

MAS core inflation, which strips out the key inflation drivers of private transport and accommodation costs, is also expected to come in at 2.6 per cent for 2012, up from last survey's 2.5 per cent median forecast.

The official view is that 2012's headline inflation will be slightly above 4.5 per cent and core inflation will be around 2.5 per cent.